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Americans' confidence in economy at 5-year high
Aggregated Source: Shanghai Daily: Business

AMERICANS' confidence in the economy jumped in May to a five-year high, lifted by a better outlook for hiring, rising home prices and more optimism about business conditions. The increase suggests consumers may keep boosting economic growth this year.

The Conference Board, a New York-based private research group, yesterday said its consumer confidence index rose in May to 76.2. That's up from a reading of 69 in April and the highest since February 2008.

The jump in confidence followed a separate report that showed the housing recovery is strengthening.

Home prices jumped 10.9 percent in March compared with a year ago, the most since April 2006, according to the Standard & Poor's/Case Shiller 20-city index. All 20 cities showed year-over-year gains.

Consumers' confidence in the economy is watched closely because their spending accounts for 70 percent of US economic activity.

Conference Board economist Lynn Franco said Americans are more optimistic after worrying earlier about higher taxes and federal spending cuts.

Higher home prices and stocks gains are making Americans feel wealthier. That has offset some of the pinch from the tax increase and kept consumers spending.

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